Various Depreciation Methods-First Year
on September 5, 2009, Apollo Purchased

question 78

Essay

Various depreciation methods-first year
On September 5, 2009, Apollo purchased equipment costing $40,000, with an estimated life of 6 years and an estimated salvage value of $4,000.
Compute the depreciation expense Apollo would recognize on this equipment in 2009, assuming:
$$\begin{array} { | l | l | } \hline \text { (a) Straight-line depreciation with fractional periods rounded } \\\text { to the nearest full month }& \$\_\_\_ \\\hline \text { (b) } 200 \% \text {-declining-balance, using the half-year convention }& \$\_\_\_ \\\hline \text { (c) } 150 \% \text {-declining-balance with fractional periods rounded } \\\hline \text { to the nearest full month } & \$\_\_\_ \\\hline\end{array}$$

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Definitions:

Accounts Payable

A liability account that tracks money owed by a business to suppliers or creditors for goods and services received.

Income Tax Rate

The percentage at which an individual or corporation is taxed on their income.

Net Income

The amount of earnings remaining after all expenses, including taxes and operational costs, have been deducted from total revenue; a measure of company profitability.

Revenues

The amounts earned and recorded from a company’s day-to-day business activities, mostly when a company sells products or provides services to customers or clients.